Q3 2023 Loop Media Inc Earnings Call
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And then I'll turn the call over to John Nierman loop.
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And Neil <unk> CFO you may begin.
Thank you and good afternoon, everyone.
And may we provided a sore throat.
Two three resolved.
Today, we can announce that we surpass those forecast across the board.
To avoid redundancy. During this call are CFO , Neil will take you through our financial results from my part of the call I would like to set the table on the challenges we faced and what we believe the road ahead looks like.
As previously disclosed in our public filings, we experience headwinds from the digital programmatic adds market beginning in the second half of our fiscal Q1 that ended in December 31, 22, and that has continued through our fiscal Q3 ending in June .
Thus the challenging past couple of 'em quarters has adversely impacted our prior exponential growth.
Would like to be clear that we believe the slowing of growth will prove to be a temporary moment in time for us.
We look ahead, some more positive outcomes in future periods.
Like many companies that rely on the advertising market, we continue to see industry, a macro headwinds and the overall digital ads pain.
As we pre announced in May we knew the Q3 would be a challenging quarter in which we would see our revenue and our bottom line negatively impacted.
While they are indeed was and still is albeit to a lessening extent a macro component of negatively impacts in our business over the prior a few quarters. It has become more clear that we needed to further engage with our advertising parkers to continue our dialogue with them over how they view the company's platform.
Historically out of home advertising has been static or digital signage not linked to premium content.
Many brands don't value that reads like they do traditional broadcast table or know streaming consumer television, where advertisers know they get premium content and target consumers blue.
Blue is just another type of streaming television and another C. T V platform, but we reach consumers away from their homes rather than in their homes are.
Our company has premium content made by and distributed by some of the top media companies in the world, including Disney Universal Sony Warner Brothers, and top brands like Tictoc Gopro Billboard World Circling collegiate conference's like the a C C and many patterns.
What we think first us apart from most other screaming platforms does that we deliver short form content, which plays well in public venues as opposed to traditional consumer streaming services are generally provide longer form content we.
We prioritize music video concept, because we believe music videos or the ideal content venues looking to entertain and engage their customers. We don't believe their customers in and out of the home locations are interested in watching T V series or movie in a bar.
Restaurant retail store or similar locations.
Instead, the company delivered short form videos that we believe he'll avoid where those venue owners are no longer at the mercy of just plain cable T V like they have for decades.
Fortunately, we've been able to attack this challenge head on like the streaming pioneers before us to create a new categories for both content providers and advertisers, we must work with others to do the same today. We are pleased to announce that Microsoft advertising, which one Xander has created a new inventory category for some.
Apply side partnerships called C. T V out of all this.
This first of its kind F. S. T distinction will provide an additional distribution category to appetizers and demand-side partners from which they can access them purchase Luke media advertising impressions, just like they would on other consumer C. T V platforms.
Another D. S. P. N S. S. D platforms. Luke media is often categorize as D O H or digital out of home C. T V connected T V streaming or other.
This new category expands Luke media as potential reach in the marketplace for all potential D O H advertising buyers, including those advertisers looking to distribute AD on C. T V out of home service platforms.
We believe this bodes well for future revenue growth as other advertising partners start to adopt this new category, making it much more clear that our platform is indeed, a premium place were advertising and brands can reach desirable audiences going forward.
Loop is excited to work with other key partners to lead significant industry evolution like this.
We often I ask people to think about how they watch T V. In their homes around 2007. The answer is about 98 per cent arms at that time were still watching network T V or linear program channels delivered through cable and satellite three.
Streaming services like Netflix and Roku Renaissance and no one had heard of Hulu Pluto or others.
<unk>, where we are today in our homes and majority of the population streaming instead of using cable and satellite. However businesses are still effectively stock in 2007 with about 98% of them using cable and satellite for reasons terrestrial television because they've never had a streaming service that they believed was appropriate.
Her license for their use until now with Luke The company is looking to fill what we believe is avoid in the media video space for out of home location are delivering free AD supported concept of those locations, providing customizable and contextual streaming T V that is suitable for them.
As we look to move the company in this financial performance back to historical levels, we have focused our business and operations on diversifying our revenue sources and reducing the impact of general advertising market downturns like we have recently experienced.
We have sought to bolster the company is direct sales efforts and focus on key advertising geographies and venue types.
We believe our recent growth and distribution and the extended reach of our platform has set us up for future revenue growth.
While we have made much progress addressing the revenue opportunities and foundation for the company. We have had to focus our efforts on increased efficiency and cost cutting in recent periods as well, while still maintaining our dedication to the continued growth of our business as.
As a result, we have make cuts and adjustments across several aspects of our business.
We completed a plan to reduce our overall SG&A cost from fiscal Q2 to fiscal two three by approximately 20%, including labor and various other operating cost part of this reduction included eliminating some non revenue generating.
Continue to invest in expansion of our revenue in AD sales team.
I want to emphasize that we've always taken pride and looping a very lean organization, especially compared to other tech and media companies. We have never thought that huge additions number of employees was a positive sign the company was growing wisely in fact, we've seen that in press over the past year of the hugely awesome a number of top tech immediate companies is.
As a result loop had only 73 full time employees at the end of Q3 as we've always look for our team to be empowered to do more than they thought they could that model has served as well we take way more pride in the retention of our employees most of whom had been with us for multiple years and still many from the beginning of Arthur.
<unk>, we know that we have a terrific team in place of proven theme that delivered fantastic growth of the prior fiscal year and they.
Along with some excellent new additions to our sales team will be the core group that will deliver us terrific growth again.
In other areas to help our pushed toward delivering results to our shareholders in the near term, we also renegotiated or sign constant licenses to reduce average contact cost and found ways to strengthen our license margins. So that in we saw an uplifting margin toward the end of the quarter and will continue to work towards <unk>.
Further improvements.
Many of you know, we distribute our content and advertising inventory to digital screens located in out of home locations, primarily through are owned and operated streaming platform of blue players referred to as R. O N O network and through screens on digital platforms, one and.
Created by third parties referred to as a partner platform.
Even in tough markets like we have been facing a recent periods. We believe in our long term business model, providing free streaming T V to businesses, who are free to the user lute player and we believe that models should make the distribution growth and are nowhere no platform more resilient that appears subscription based business model or one that <unk>.
Choirs and end user could provide a credit card or other payment information.
Our distribution footprint increase substantially towards the end of Q3 with the addition of 12000 partner platform screens, bringing our total loop player slash partner screens to over 70000. In addition are monthly video impressions viewed are estimated to be over 2 billion. We are in all.
One solution offering all that they need in terms of appropriate content and digital signage for free which is truly disruptive to the traditional pay T model and the additional digital sinus charges that go away with loop looking.
Looking ahead, we believe the digital Adam home retail market will continue to gain an increase each year of advertising spin Ah several industry forecasts predict with our strong pipeline of Parker's and expanding distribution network and our commitment to efficient new customer acquisition. We believe the company is well positioned to deliver revenue.
<unk> is the advertising market improves with that I will turn the call over to kneel to take you through our financial results Neil.
Thank you John and good afternoon, everyone. As we review our financial results. So I wanted to remind everyone and all comparisons and variance commentary refers to the prior year's quarter unless otherwise specified.
And the fiscal third quarter revenue decreased approximately 47 per cent to $5.7 million compared to $10.8 million of the year ago period. The decrease was primarily driven by reduction and AD placements as well as general slowdown in the overall digital advertising spend due to the macro environment.
Gross profit and the fiscal third quarter of 2023 was $1.8 million compared to $3.8 million for the same period in fiscal 2022. The reason for the reduction in gross margin dollars is due to reduced sales versus the prior year quarter as well as the decline in the gross margin percentage, primarily due to mix and challenges in our ability.
Leverage some of our fixed costs relative to streaming of our content.
Gross margin rate was 31.8% compared to 35% in the prior year quarter.
The decrease was primarily driven by revenue mix the year ago period, only included the lower margin impact of our partner platform business for a portion of the quarter, which launched in may of 2022 versus a full quarter and pack this year.
Partner platform business tiers of lower gross margin, but has lower investments and acquisition and marketing expenses requirements, resulting in similar operating margins to our own Oh platform.
Total sales general and administrators SG&A expenses and the fiscal third quarter, excluding stock based compensation depreciation and amortization were $6.3 million compared to 5.9 million for the same period in fiscal 2022 and lower than the $7.8 million for a previous second <unk>.
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Quarter over quarter decrease of 20 per cent was primarily due to a decrease in marketing span payroll related and various other operating expenses, which were targeted proficiency. We anticipate we will continue to gain efficiencies in SG&A, which will be reflected in Q4 and into fiscal year 2024.
Net loss and the fiscal third quarter of 2023, with 7.9 million or 14 cents loss per share compared to a net loss of $5.7 million or 11 cents loss per share for the same period in fiscal 2022.
Adjusted EBITDA and the fiscal third quarter was a loss of $3.7 million compared to a loss of 1.9 million for the same period in fiscal 2022.
Turning to our balance sheet cash and cash equivalents were $6.4 million on June 30th 2000, twenty-three compared to $4.7 million on March 31st 2023 <unk>.
The increase was primarily driven by 8.3 million in equity offerings as previously disclosed in our public filings and our continuation managing or cash through improving the days of our outstanding accounts receivable negotiating approved vendor payment terms and overall good expense controls as of June 30th 2023, we had 10.
Point $1 million total death compared to $9.1 million as of March 31st 2023.
We continue to exhibit incremental lute player groups, both year over year and quarter over quarter. In addition, we added 12000 screens for a partner platform business at the end of the third quarter, which increased our total screens in this business to 36050 per cent increase over the previous quarter.
Our commitment to target marketing and expansion of our lute player distribution will be the primary driver for growth and driving profitability in the future. Despite the current add marketing softness John alluded to earlier, we plan to continue increasing penetration of our Lou players.
And efficiently growing quarterly active units to be poised for increased revenue growth when digital advertising spend increases we are focused on increasing our revenues gross margins and leveraged our expenses in line with revenues as we plan to continue to reduce the adjusted EBITDA loss on a quarterly basis.
I'd like to thank everybody for listening today, we look forward to providing future updates on our next conference call.
I would like to thank everyone.
At this time, if you would like to ask you. A question. Please press star one on your telephone keypad, what pause for a moment to compile that keen on a roster.
I got a star line, if you would like to ask a question.
We currently have no questions on the Q at this time, John I'll turn the call back over to you.
Okay, I would like to thank everyone for joining the call. Today, we are excited about where the business is heading and I look forward to providing further updates on your next call. Thank you everybody.
This concludes today's conference call you may now disconnect.
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